Tencent Leverages WeChat Ecosystem to Dominate the Cloud Services Market
The Chinese digital behemoth Tencent, which owns the popular app WeChat, is advancing cloud services through its own ecosystem.
Tencent Cloud CEO Dowson Tong discussed how the company is using WeChat’s vast network to differentiate itself from rivals like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
https://twitter.com/CNBC/status/1858377783547711537
The WeChat Ecosystem as a Source of Competitive Advantage
Tencent is trying to draw in cloud service customers using its WeChat platform, which has 1.3 billion monthly active users. A large number of these clients want to use Tencent’s technology and experience in creating WeChat’s ecosystem to create their own super applications. According to Tong, these services are particularly sought after by customers in the government and banking industries. For example, in 2023, Canadia Bank in Cambodia and Tencent Cloud collaborated to release a mobile banking app.
Tencent, in contrast to its rivals, incorporates cloud infrastructure into its platform that interacts with consumers. It has an advantage over companies like Amazon, Google, and Microsoft since they offer their services on several platforms rather than through a single app.
Tencent’s Unique Selling point
Another advantage is Tencent’s hybrid cloud strategy. It blends on-premise private resources with public cloud services, where users share resources. As a result, businesses are able to autonomously manage and maintain own data centers. This strategy, according to Tong, enables Tencent to contend with multinational behemoths that frequently give public cloud services top priority.
In addition to offering hybrid solutions, Tencent customizes its offerings for niche markets including video, gaming, entertainment, and social media. This modification fortifies WeChat’s whole ecosystem and improves its performance as a super app.
Asia’s Best Apps and More
Particularly in Asia, super apps one-stop platforms for chatting, payments, and other services are becoming more and more well-liked. Tencent’s WeChat, Gojek, and Grab are all excellent examples. The global super app market was valued at $61.3 billion in 2022 and is projected to expand at a rate of around 30% each year until 2030, according to research.
Tencent’s ability to combine multiple services into a single platform offers it a distinct edge in Asia, whereas Western markets choose specialized apps. According to analysts, businesses hoping to improve data collecting and user engagement may find significant added value in this data-driven approach.
Opportunities and Challenges
Tencent’s dependence on the super app model may not have a direct impact on the priorities of international cloud clients, despite its advantages. Cloud users continue to prioritize factors like security, scalability, and infrastructure dependability who claims Wei Sun an analyst at Counterpoint Research.
However, Tencent offers special prospects due to its deep interaction with the WeChat ecosystem and its capacity to develop customized on-premise solutions. Tencent has an advantage in the cutthroat cloud market thanks to these skills, which enable it to build a data flywheel where more data results in higher value for customers.
Tencent’s approach of utilizing WeChat and providing customized cloud solutions makes them a formidable rival in the global cloud market. Even though not all cloud service offers revolve around super apps, Tencent’s creative strategy might draw in customers seeking integrated solutions, particularly in Asia’s quickly expanding super app sector.
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals